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Inside Washington (09/19/2008)

* WASHINGTON (9/22/08)--The Treasury Department announced a temporary guaranty program for U.S. money market mutual funds. The Treasury will insure the holdings of any publicly offered eligible money market mutual fund that pays a fee to participate in the program. The program “should enhance market confidence and alleviate investors’ concerns about the ability for money market mutual funds to absorb a loss. Concerns about the net asset value of money market funds falling below $1 have exacerbated global financial market turmoil and cause severe liquidity strains in world markets,” the Treasury said in a statement ... * WASHINGTON (9/22/08)--The Federal Deposit Insurance Corp. (FDIC) said it is committed to taking a “flexible supervisory approach” for institutions affected by the conservatorship of Fannie Mae and Freddie Mac. The agency said it will work with institutions that are required to develop a Capital Restoration Plan under the Prompt Corrective Action guidelines. The FDIC also will be flexible in considering requests for waivers from brokered deposit restrictions for institutions that have become adequately capitalized, the agency said in a financial institution letter ... * WASHINGTON (9/22/08)--Sen. Jack Reed (D-R.I.) said during a Thursday hearing that he wants regulators to tighten controls on off-balance sheet assets. More transparency is needed, he said (American Banker Sept. 19). Reed also supports the Financial Accounting Standards Board proposal to change the way banks count certain off-balance sheet assets--which would prevent special-purpose entities from being counted as assets. Reed noted that if firms keep off-balance sheet assets, they need to let investors know. Companies with more accurate accounting fare better in today’s marketplace than those who are slow to realize losses, he added ...